Samsung ships 43 million smartphones in Q1, dwarfs HTC and Motorola

The Droid Razr didn't win enough hearts, and HTC failed to get up to 4G speeds.

Samsung and Apple are solidifying their positions as the number one and two smartphone vendors on the planet, according to a report from ABI Research. The two companies shipped 78 million handsets in the first quarter of the year, or 55 percent of the total, as big names like HTC, Motorola, Nokia, and RIM continue to backslide.

Apple shipped 35 million handsets in Q1 while Samsung shipped 43 million, powered by popular models like the Galaxy S II. The two companies also captured 90 percent of the market's global profits, according to ABI, and Samsung alone captured 29.7 percent of the total shipments.

Surprisingly, some of their gains come at the expense of two other big names: HTC and Motorola. Motorola slipped only a bit, from 5.4 million handsets in Q4 2011 to 5.1 million in Q1 2012. Michael Morgan, ABI's senior analyst for mobile devices, told Ars that the drop was "likely due to seasonality." Motorola had a handful of handset launches spanning last fall, including the Droid Razr (which was launched globally as the Motorola Razr), Photon 4G, and the Droid Bionic.

HTC's global decline was much bigger. The company was down to 6.9 million shipments in Q1 2012 from 10.1 million in Q4 2011. Morgan says the big drop is "due to lack of demand for their LTE handsets compared to the iPhone and Samsung devices." HTC seemed largely focused on Windows Phones last fall, which may not have made a big splash; the company's high-profile trio of One phones running Android have only just arrived on the market. HTC CEO Peter Chou said that the company released too many phone models last year. "We tried to do too much," Chou said.

In fact, HTC was beaten handily even by RIM last quarter. RIM saw a 20 percent decline between the two quarters measured, but is still hanging on at 11.1 million phones shipped in Q1. Nokia, which largely gave up on its feature phone business and Symbian handsets to focus on smartphones and the Windows Phone platform with handsets like the Lumia 900, saw a 40 percent decline, with 11.9 million smartphones shipped in Q1.

Casey Johnston
Casey Johnston is the former Culture Editor at Ars Technica, and now does the occasional freelance story. She graduated from Columbia University with a degree in Applied Physics. Twitter@caseyjohnston

Having both Samsung Note and HTC One X I cannot understand this huge difference in market share... phones are very similar and the prevalance of Samsung must be because of better brand recognition and better sales/support networks.

Unless HTC jumps back with the latest Android phones, but in principle the two offerings are very similar, not really clear to me why would customers prefer one over the other much.

edit: let alone to explain 43mil vs 6.9mil??? that is 6x sales difference for what are essentially the same devices, I guess this is mostly the power of Samsung marketing.

The crazy part is the revenue to profit ratio. If Samsung and Apple are taking the lion's share of the profit, it means that the other companies are really just looking to get a little bit of table scraps: if you collect the other vendors together, they've sold 45% of handsets and gotten just 10% of the profits to show for it. That's not so hot, and when you figure they are all fighting for that slice, it's amazing that it is still considered worthwhile for all of them. Somebody (or 5) has to bow out in the name of common sense, since nobody is bringing anything new to the table (HP coulda, but hey, they're HP, why would they?).

Unless HTC jumps back with the latest Android phones, but in principle the two offerings are very similar, not really clear to me why would customers prefer one over the other much.

edit: let alone to explain 43mil vs 6.9mil??? that is 6x sales difference for what are essentially the same devices, I guess this is mostly the power of Samsung marketing.

its not slightly better android phones that are going to make any difference. probably makes none.samsung has better deals with carriers, HTC does not have many deals last i heard.this means carrying phones (a really big deal obviously) and promoting phones.

Having both Samsung Note and HTC One X I cannot understand this huge difference in market share... phones are very similar and the prevalance of Samsung must be because of better brand recognition and better sales/support networks.

Unless HTC jumps back with the latest Android phones, but in principle the two offerings are very similar, not really clear to me why would customers prefer one over the other much.

edit: let alone to explain 43mil vs 6.9mil??? that is 6x sales difference for what are essentially the same devices, I guess this is mostly the power of Samsung marketing.

While I would agree that the One X is a match for the Galaxy S3 the same can not be said for HTC's earlier models, the sensation {as it's called here not sure about the US} was blown away by the Galaxy S2 in every single aspect including price, I assume the companies are still shipping many of these devices {or I know samsung is, not sure about HTC} and that the poor sales on HTC's part are more a result of older model's which I expect to stabilize towards Q3.

HTC only focuses on the phone market so people have less opportunity to use HTC products than a company like Samsung who have their fingers in so many pies. Just looking around my room I have a Samsung monitor, a Samsung hard drive and I know we have a Samsung fridge all these have been reliable so this makes me tend to trust Samsung and I would definitely buy a Samsung phone.

Also article's like these may explain Samsung's success.

Quote:

BOSTON, Jun 06, 2012 (BUSINESS WIRE) -- Samsung is the most preferred consumer technology brand, ahead of Sony, HP and Apple, according to ConsumerMetrix Technology Brand Preference Index just released by Strategy Analytics. In a survey of more than six thousand consumers in the US and Europe, "Technology Brand Preferences," Samsung received the highest overall preference rating of +41 percent, followed by Sony at +29 percent, HP at +20 percent and Apple at +19 percent. The lowest brand preference ratings were given to Lenovo (-37 percent), RIM (Blackberry) (-28 percent) and Sanyo (-26 percent). Respondents were asked to consider how likely they would be to choose each of more than twenty global brands when buying technology products such as computers, mobile phones and TVs.

Here are some alternate Headlines:1. Samsung beats Apple in Smartphone sales.2. Apple no longer the king of the hill in Smartphone sales.3. We finally have the answer to the age old question: How about them Apples?

But alas, Ars (Apple) Technica could not give credit where it was due.

HTC only focuses on the phone market so people have less opportunity to use HTC products than a company like Samsung who have their fingers in so many pies. Just looking around my room I have a Samsung monitor, a Samsung hard drive and I know we have a Samsung fridge all these have been reliable so this makes me tend to trust Samsung and I would definitely buy a Samsung phone.

Also article's like these may explain Samsung's success.

btw I also have a Samsung fridge :-) (and one of the monitors, but not TV)... plus it makes sense that the deals with carriers make up the bulk of their sales success, in addition to the strong brand. It is interesting to see that Sony still polls strongly and HP in the third place!?! What is that all about?

While it cannot be argued that Samsung sells a lot, and the difference is not terribly material to the article, it needs to be corrected so that it's understood to the masses. When you want to compare numbers to find out who's number one in raw units, that will be impossible until Samsung publishes units sold. But no manufacturer wants to do that because they like to channel stuff and inflate their numbers.

In fact I would formally ask for a correction because it's a factually incorrect statement please. Thanks.

BOSTON, Jun 06, 2012 (BUSINESS WIRE) -- Samsung is the most preferred consumer technology brand, ahead of Sony, HP and Apple, according to ConsumerMetrix Technology Brand Preference Index just released by Strategy Analytics. In a survey of more than six thousand consumers in the US and Europe, "Technology Brand Preferences," Samsung received the highest overall preference rating of +41 percent, followed by Sony at +29 percent, HP at +20 percent and Apple at +19 percent. The lowest brand preference ratings were given to Lenovo (-37 percent), RIM (Blackberry) (-28 percent) and Sanyo (-26 percent). Respondents were asked to consider how likely they would be to choose each of more than twenty global brands when buying technology products such as computers, mobile phones and TVs.

The crazy part is the revenue to profit ratio. If Samsung and Apple are taking the lion's share of the profit, it means that the other companies are really just looking to get a little bit of table scraps

Here's one way to visualize who's making money:

That includes all phones, smart and dumb. Note that the profit is the brighter color. For many of the recent quarters HTC, Sony, Motorola, and LG have been losing money.

I've owned HTC phones for my last two devices (HD2 and Thunderbolt), and let me tell you, with the stock OS, they are complete shit. Cyanogen on the HD2 saved it from being a brick; Thunderstick on the Thunderbolt turned it from a brick into a viable phone (and adding in an extended battery helped that along as well.)

The enthusiast in me loves HTC, but I can see how it doesn't have much love outside that.

While it cannot be argued that Samsung sells a lot, and the difference is not terribly material to the article, it needs to be corrected so that it's understood to the masses. When you want to compare numbers to find out who's number one in raw units, that will be impossible until Samsung publishes units sold. But no manufacturer wants to do that because they like to channel stuff and inflate their numbers.

In fact I would formally ask for a correction because it's a factually incorrect statement please. Thanks.

Look two posts above you. No one really knows what Samsung sold or shipped. They don't release those numbers - it's all conjecture. We know Apple and Samsung are #1 and #2 but any other claims are extrapolated.

It baffles me that Sony is still seen as a preferred brand. They're not low quality, but neither are they the quality monsters they were 20 years ago.

I imagine {having absolutely no proof} that Sony's brand status is tied up mostly in the playstation brand {which is far stronger than the X BOX in Europe}, this is about the only Sony product I can think of off hand that I own and for the most part it has been quite good and for most people I imagine playstation is almost a household name.

Having both Samsung Note and HTC One X I cannot understand this huge difference in market share... phones are very similar and the prevalance of Samsung must be because of better brand recognition and better sales/support networks.

Samsung is dominant in Asia, especially in Japan and in their home country of South Korea. I'm curious about the "regional" numbers and if Ars could break down the sales by regions, it will help to understand the trends a lot more.

The crazy part is the revenue to profit ratio. If Samsung and Apple are taking the lion's share of the profit, it means that the other companies are really just looking to get a little bit of table scraps

Here's one way to visualize who's making money

That's a chart of 2 year old data. Things are similar but even more exaggerated now.

As far as the shipping vs. selling, While Samsung may be reporting shipments, they are not channel stuffing. They are selling all the handsets they are shipping eventually, so it makes little sense to try and dispute that.

That said, for recent quarters, Apple was pulling in something over 70% of the profit in the mobile phone market worldwide (not just smartphones), and Samsung in the mid 20s. Everyone else is either losing money or getting tiny scraps.

And yes, we will forever be comparing apples to lawnmowers until all the various vendors report their numbers in a consistent, honest manner.

This is a mountain out of a molehill. Samsungs shipments continue to increase quarter over quarter and year over year. They would not be making more phones if the ones they manufactured the previous quarter were not sold. That would be idiotic(and where they heck are they storing this mountain of unsold phones???).

One can safely say that until Samsung shows a *decline* in quarter over quarter and year over year sales, there is no reason to consider their shipped numbers as anything other than sold numbers. At the very least, the difference is so negligible that it only serves to provide arument points for fanboys.

Myself, I am just thrilled that MS made somewhere between $215-645 million this quarter off Samsung alone in Android licenses. I'm very curious what Samsung's profit margin is on each phone by comparison...

While it cannot be argued that Samsung sells a lot, and the difference is not terribly material to the article, it needs to be corrected so that it's understood to the masses. When you want to compare numbers to find out who's number one in raw units, that will be impossible until Samsung publishes units sold. But no manufacturer wants to do that because they like to channel stuff and inflate their numbers.

No, correction. Please get pen & paper and do the math. A channel holds X amount of phones. Therefore, there are still X phones in the channel when Samsung inserts 43 million more. Therefore, those X phones (from last quarter) are either sold now, or still in the channel.

Thus, even if these were "shipped" numbers (which we don't know), it can accurately be said: Samsung sold 43 million phones. They started & ended the quarter with about the same number of phones unsold in the channel. That is how businesses operate. They're not like books where the unsold are destroyed.

dear lord. the meme of shipped vs sold needs to die. all the vendors report shipped and not sold (not to mention this report only deals with sold, or at least what abi considers sold). the apple loonies make it seem like Apple are complete idiots when it comes to channel management and don't have any inventory (hint, can you go to a store and buy an iPhone today?).

imo, the real story is how on earth did Samsung get that many people to buy into their phones given their record of crappy customer service?

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Myself, I am just thrilled that MS made somewhere between $215-645 million this quarter off Samsung alone in Android licenses

do you have a link for that info? As far as I can can tell MS has made nothing from Android as they have yet to report anything.

MS asked for $15, Samsung supposedly countered with $10. I usually start the range at $5 since the deal turned out to be broader than just phones so its possible Samsung used other technology to reduce MS from thier original request. Realistically its probably in the $10 range.

At current rates, MS stands to earn between one and three billion dollars this year from Samsung alone. Amazon, HTC, B&N and dozens of others also pay license fees, with rates depending upon several factors, including which patents are being violated(specific Android implementations do not all use the same technologies), and whether or not MS had to litigate(Amazon got a *super* cheap deal since they approached MS back in 2010 and offered to pay based on their own IP analysis).

Samsung has numerous carrier phones and have the capacity to bend over for many carriers....i.e Different flavours of one phone(Galaxy SII) for carriers in USA. Their numbers don't surprise me at all. This coupled with the fact that they sell phones that many people actually want(Different flavours and ranges of Android and Bada phones).

Nokia market share loss is phenomenon...I know all about the transition but it still boggles the mind. Good thing for Nokia is that they still have some mindshare(around my location....not USA) in the mid-low end devices but Samsung is cornering up that end as well. They really need to get their act/marketing together this coming fall.

MS asked for $15, Samsung supposedly countered with $10. I usually start the range at $5 since the deal turned out to be broader than just phones so its possible Samsung used other technology to reduce MS from thier original request. Realistically its probably in the $10 range.

That's what I thought. Given that two SEC reporting quarters have been posted since those stories, that means the numbers are no where near what the estimates say as MS would be violating SEC regulations by not reporting it. Therefore it must be vastly reduced (21m-64m) or the payment must be in some other from aside from cash.

Actually, we don't know how many smartphones Samsung shipped. They haven't been giving these numbers out since early last year, and so companies guessing as to this number have no way of knowing whether they are off by one million or ten million.

As an example, iSupply has estimated that this same quarter, Samsung shipped 32 million smartphones. IDC estimated 38 million. So who is right? There is no way to know.

We do know that Apple sold 35.1 million, because they said so. They also said that there was a certain number of days supply in the channel. When you add that to the sold number, you come up with the shipped number, which totals about 38 million.

I would like to see more questioning of numbers which can't be verified, because the company in question refuses to do so by releasing their own numbers. Then it must be questioned why that company has stopped giving out those numbers (for tablets as well). It's usually because the numbers aren't as good as they want you to believe.

While it cannot be argued that Samsung sells a lot, and the difference is not terribly material to the article, it needs to be corrected so that it's understood to the masses. When you want to compare numbers to find out who's number one in raw units, that will be impossible until Samsung publishes units sold. But no manufacturer wants to do that because they like to channel stuff and inflate their numbers.

No, correction. Please get pen & paper and do the math. A channel holds X amount of phones. Therefore, there are still X phones in the channel when Samsung inserts 43 million more. Therefore, those X phones (from last quarter) are either sold now, or still in the channel.

Thus, even if these were "shipped" numbers (which we don't know), it can accurately be said: Samsung sold 43 million phones. They started & ended the quarter with about the same number of phones unsold in the channel. That is how businesses operate. They're not like books where the unsold are destroyed.

Except that these aren't even Samsung's numbers. We don't really know what the. Umbers are because Samsung won't tell. This is just a guess. Since the numbers guessed for the quarter for Samsung range from 32 million to 43 million, how do we pick what might be more correct? What they did for the article here is to pick the highest estimate made by a company, and used that.

If they picked iSupply's number of 32 million, the headline would be that Apple beats Samsung's smartphone numbers again for the number one position in the smartphone market.

But they chose to use this one. And they used Apple's sold numbers, not including the number of days Apple tells us is in the channel, which would have brought the shipped number to about /8 million. So all of this is suspect.

We do know that Apple sold 35.1 million, because they said so. They also said that there was a certain number of days supply in the channel. When you add that to the sold number, you come up with the shipped number, which totals about 38 million.

ugh. Per Apple 10Q for Q2-2012; "For most of the Company’s product sales, these criteria are met at the time the product is shipped. For online sales to individuals, for some sales to education customers in the U.S., and for certain other sales, the Company defers recognition of revenue until the customer receives the product because the Company retains a portion of the risk of loss on these sales during transit". Which makes perfect sense as nobody reports sold, only shipped (except Samsung that reports nothing). you raise a good question; why is ABI any better or worse than iSupply or NPD or any other source?

MS asked for $15, Samsung supposedly countered with $10. I usually start the range at $5 since the deal turned out to be broader than just phones so its possible Samsung used other technology to reduce MS from thier original request. Realistically its probably in the $10 range.

That's what I thought. Given that two SEC reporting quarters have been posted since those stories, that means the numbers are no where near what the estimates say as MS would be violating SEC regulations by not reporting it. Therefore it must be vastly reduced (21m-64m) or the payment must be in some other from aside from cash.

TLDR; "where's the money?"

That completely depends upon how they are account for it. If they formed a subsidiary and used it to manage all revenue from cross licensing, that would make sense as a requirement, but I am not aware of any SEC requirement that says every company has to break out IP as a seperate reporting metric. Its likely that for MS, IP revenues are part of other divisions or even part of individual group revenues. If a given technology was patented by the core Windows team during the development of Windows at some point, like say the FAT patent, then its possible that income from that patent is accounted for in CoreOS revenues, after all it was their research time that was spent on it.

Its also possible its in another area. I am not sure SEC reporting works the way you want it to. I'm sure they report some IP income seperately(I seem to remember them discussing this a year ago) but I do not know that they claim to seperate out all of it this way since its really not a seperate business unit.

Also, there is no way they would have reduced it on the scale you suggest. Nobody thinks they get less than $5/handset, most put it at twice that. In the range you state would be silly, the FAT patent alone across all their product lines could hit the lower end of that range and its a slam dunk in court.

Actually, we don't know how many smartphones Samsung shipped. They haven't been giving these numbers out since early last year, and so companies guessing as to this number have no way of knowing whether they are off by one million or ten million.

As an example, iSupply has estimated that this same quarter, Samsung shipped 32 million smartphones. IDC estimated 38 million. So who is right? There is no way to know.

We do know that Apple sold 35.1 million, because they said so. They also said that there was a certain number of days supply in the channel. When you add that to the sold number, you come up with the shipped number, which totals about 38 million.

I would like to see more questioning of numbers which can't be verified, because the company in question refuses to do so by releasing their own numbers. Then it must be questioned why that company has stopped giving out those numbers (for tablets as well). It's usually because the numbers aren't as good as they want you to believe.

I'm just going to point out that there is zero reason for anyone to release shipped/sold numbers. It offers no competitive advantage to do so publicly. For those who need to know a private disclosure under NDA is plenty. Manufacturers have reason to feed internet fanboy wars.

Its similiar for Amazon. Nobody knows the real number of Kindle devices sold and Amazon has no reason to release those numbers. Why? Because the software is available for more than their own hardware. Every iPad sold might as well be seen as a potential Kindle since Amazon makes thier money on content, not hardware. So releasing their hardware numbers would only muddy the waters, permitting the lower number of shipped hardware to make thier platform appear smaller than it actually is. For Samsung and others(arguably even Apple), hardware numbers are also deceptive since smartphones are owned 2-3 years on average before being replaced. A hot seller for six months can take a very significant chunk of current users even if it barely budges the overall install base. The kind of numbers that would be really useful would be numbers from carriers based on active devices per OEM...

but I do not know that they claim to seperate out all of it this way since its really not a seperate business unit.

According to their annual report they record FAT royalties under legal and Windows Mobile fees under the Entertainment division. I suppose they can hide billions of dollars in revenue in some division (say Windows) to prop it up but eventually that would have to be accounted for.

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Nobody thinks they get less than $5/handset, most put it at twice that. In the range you state would be silly, the FAT patent alone across all their product lines could hit the lower end of that range and its a slam dunk in court.

Hardly. Their beat down by B&N shows how tenuous their patent position is in with regards to Android. It's just as plausible Microsoft got a box of cigars and a nickle as opposed to 600m/qtr. The fact is nobody knows, and the money is nowhere to be found.

While I would agree that the One X is a match for the Galaxy S3 the same can not be said for HTC's earlier models, the sensation {as it's called here not sure about the US} was blown away by the Galaxy S2 in every single aspect including price, I assume the companies are still shipping many of these devices {or I know samsung is, not sure about HTC} and that the poor sales on HTC's part are more a result of older model's which I expect to stabilize towards Q3.

I'd have to disagree somewhat on that. The sensation had a very nice part metal part plastic body CNCd from one piece of metal. The screen was of higher resolution and didn't suffer the crappy colors of AMOLED.

That's not to say the GS2 was better in other areas. Sense on ICS is great, but before it was a hog. I still use it since the features it offers exceeds what stock ICS offers, especially the phone app.

Here are some alternate Headlines:1. Samsung beats Apple in Smartphone sales.2. Apple no longer the king of the hill in Smartphone sales.3. We finally have the answer to the age old question: How about them Apples?

But alas, Ars (Apple) Technica could not give credit where it was due.

but I do not know that they claim to seperate out all of it this way since its really not a seperate business unit.

According to their annual report they record FAT royalties under legal and Windows Mobile fees under the Entertainment division. I suppose they can hide billions of dollars in revenue in some division (say Windows) to prop it up but eventually that would have to be accounted for.

I'm not sure why this would be considered to be unaccounted for. There is no requirement to seperate these things into their own line items.

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Nobody thinks they get less than $5/handset, most put it at twice that. In the range you state would be silly, the FAT patent alone across all their product lines could hit the lower end of that range and its a slam dunk in court.

Hardly. Their beat down by B&N shows how tenuous their patent position is in with regards to Android. It's just as plausible Microsoft got a box of cigars and a nickle as opposed to 600m/qtr. The fact is nobody knows, and the money is nowhere to be found.

Interesting perspective. From what I could determine they owned B&N badly. B&N was out of cash to fight them any more(they had $22 million on hand). They settled and gave MS everything they wanted(ongoing licensing) PLUS a huge percentage of the only business they run that is profitable(college bookstores and digital). In exchange they got what amounted to petty cash for MS so they could keep their doors open for a couple more years.

I would like to see more questioning of numbers which can't be verified, because the company in question refuses to do so by releasing their own numbers. Then it must be questioned why that company has stopped giving out those numbers (for tablets as well). It's usually because the numbers aren't as good as they want you to believe.

You end your piece with pure speculation and conjecture, whilst complaining bitterly about the speculation and conjecture surrounding Samsung's sales figures. Smells like very good PR from an Apple PR person your post.